Full Metal Signs LOI with International Enexco and Choice Gold to Consolidate Copper Assets
March 19 2014 - 6:10PM
Marketwired
Full Metal Signs LOI with International Enexco and Choice Gold to
Consolidate Copper Assets
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Mar 19, 2014) - Full
Metal Minerals Ltd. (TSX-VENTURE:FMM) ("Full Metal") is pleased to
announce that it has entered into a tripartite letter of intent
("LOI") with International Enexco Inc. ("IEC") and Choice Gold
Corp. ("Choice") to consolidate the Contact and Pyramid Copper
Projects located in Nevada and Alaska, respectively (the "Copper
Projects").
Pursuant to the transactions contemplated by the LOI, Choice is
to raise no less than $2 million (the "Financing") and acquire the
Copper Projects. The Full Metal shareholders are expected to own
approximately 19% of the combined company, which is expected to be
renamed CopperBank Resources Corp. ("CopperBank"), with the
shareholders of Choice and IEC and the subscribers to the private
placement owning approximately 6%, 60% and 16% of CopperBank,
respectively. In addition, the LOI contemplates the issuance to the
shareholders of Full Metal and IEC and the subscribers to the
Financing of five year warrants to purchase a full CopperBank share
at a price of $0.10.
The consideration contemplated under the LOI to be received by
Full Metal shareholders represents an implied bid of $0.0417 per
share(1) of Full Metal, based upon the anticipated financing price
of $0.02 per share of Choice. This represents a 178% premium to
Full Metal's closing share price on the TSX Venture Exchange on
March 19, 2014, and a premium of 153% to the trailing 20-day volume
weighted average price of Full Metal as of March 19, 2014.
(1) includes the value of the Warrants, valued
using black-scholes inputs of 1.5% risk free rate and 50%
volatility.
It is also anticipated that CopperBank will complete a five for
one share consolidation upon closing of the transaction. Full
Metal's contribution to this transaction is only contemplated to
include the subsidiary holding the Pyramid Copper Project. IEC's
contribution to this transaction is only contemplated to include
the subsidiary holding the Contact Project; IEC's uranium and other
assets will not form part of the contemplated transaction.
Transaction Benefits
Full Metal believes that, if completed, the transaction will
result in significant benefits to its shareholders, including:
- An interest in multiple copper exploration and development
assets in excellent mining jurisdictions, providing shareholders
with excellent leverage to copper.
- Exposure to the advanced Contact Copper Project in Northern
Nevada that has demonstrated strong economics at today's copper
prices.
- Funding of a minimum $2 million through the financing of
CopperBank by Choice at the time of closing of the
transaction.
Rob McLeod, CEO & Director of Full Metal stated: "We believe
this transaction offers excellent benefits to Full Metal
shareholders. Not only will shareholders be a part of a new,
aggressive consolidation platform with funding in place, but they
will also gain exposure to the advanced stage Contact heap leach
project in Nevada, bringing balance to the exploration-oriented
Pyramid deposit. I look forward to working with our incoming
partners to build a strong and dynamic new copper company."
The LOI provides an exclusivity period for the structuring and
negotiation of definitive agreements for the transaction, and is
otherwise non-binding. If FMM or IEC terminates the LOI to pursue a
superior proposal transaction and completes a transaction with the
party that made the superior proposal within 12 months of such
termination, then the terminating party will be required to pay a
termination fee equal to $50,000 to each of Choice and the other
party.
Anticipated key conditions precedent for the transaction:
- Completion of due diligence by each of the parties and
execution of binding, definitive agreements;
- Approval by the shareholders of Full Metal, IEC, and
Choice;
- Completion of the Financing;
- Approval of applicable regulatory authorities including the CSE
and TSX Venture Exchange;
- Completion of the transaction between IEC and Denison Mines
Corp. ("Denison") announced by IEC today, pursuant to which Denison
will acquire all of the issued and outstanding common shares of IEC
(the Enexco US subsidiary holding the Contact Copper Project will
not be acquired by Denison);
It is anticipated that the Board of Directors of CopperBank will
be comprised of Brad Armstrong, Dan Frederiksen and Todd Hilditch
from IEC, along with Rob McLeod from Full Metal, and Gianni
Kovacevic from Choice. It is expected that Rob McLeod will be
appointed CEO of CopperBank and Bill Willoughby will be appointed
President.
About Full Metal
Full Metal is a TSX-V listed generative exploration company
focusing on precious and base metal projects in Alaska.
ON BEHALF OF THE BOARD OF DIRECTORS
Robert McLeod, CEO, VP Exploration and Director
The TSX
Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements:
Certain disclosure in this release regarding the transaction
contemplated by the LOI may constitute "forward-looking statements"
within the meaning of Canadian securities legislation. In making
such forward-looking statements, Full Metal has applied certain
factors and assumptions that the Company believes are reasonable,
including that binding, definitive agreements will be entered into,
due diligence will be satisfactorily completed and required
regulatory and shareholder approvals of the proposed transaction
will be obtained and that the other conditions to completion of the
transaction will be satisfied. However, the forward-looking
statements in this release are subject to numerous risks,
uncertainties and other factors that may cause future results to
differ materially from those expressed or implied in such
forward-looking statements. Such uncertainties and risks include,
among others, the risk that binding, definitive agreements will not
be entered into, that the due diligence of one or more parties will
not be satisfactorily completed, delays in obtaining or inability
to obtain required regulatory and shareholder approvals and
inability to satisfy the other conditions to closing. There can be
no assurance that such statements will prove to be accurate, and
actual results and future events could differ materially from those
anticipated in such statements. Readers are cautioned not to place
undue reliance on forward-looking statements. The Company does not
intend, and expressly disclaims any intention or obligation to,
update or revise any forward-looking statements whether as a result
of new information, future events or otherwise, except as required
by law.
Full Metal Minerals Ltd.Rob
McLeod604-484-7855604-484-7155rm@fullmetalminerals.comwww.fullmetalminerals.com
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